Why Students Drop Out of College, and How We Can Do Something About It

“Are you going to at least try on the test this time?” I asked one of my favorite students.

“I’ll try, but I won’t try that hard” he responded honestly.

“What? Why not? You know you have to get good scores to go to college” I knew I sounded paternalistic but I couldn’t help myself - I was his teacher and I saw his potential.

“Miss,” he replied carefully, “What’s the point? My parents can’t afford college, and the competition is too high for someone like me anyways.”

I sputtered to respond, but I knew that anything I said would be naive and undeniably from a place of privilege. I had never questioned if I would go to college, it was always assumed I would - just like my friends, and just like my parents had before me.

But because he has less money, the odds are not in his favor.

Of the high school sophomore class in 2002, only 14% of students with low incomes graduated with a bachelor’s degree by 2012. But 60% of high income students did.

In 2009, only one in four students with scarce financial resources who entered a university graduated within 6 years. Again, 60% of high income students did.

Attending a community college or 2-year institution first does not increase one’s chances of getting a degree either. According to a study by the National Center for Education Studies (NCES) between 2003-2009, only 14.3% of students from the lowest income quartile who began at a two-year institution earned an associate degree and 12.7% received a bachelor degree.

In another NCES study, a student from a low income family who scored top marks in math had the same chance of graduating from college as a student from a high income family with below average mathematical abilities.

If education is a meritocracy, the best students should be the ones to succeed. But these findings disrupt any illusion that success stems from talent if the mediocre rich have a better chance at graduating than the intelligent poor.

Yet higher education remains one of the best personal investments a person can make. The U.S. Census Bureau reported the median gap between a college graduate and high school graduate to be $19,550. Over a lifetime, individuals with a college degree are likely to make $1,000,000 more than high school graduates.

Further, longevity, health, child outcomes, and life satisfaction are all associated with a higher education degree.

Even though there are clear benefits, most students with low incomes don’t apply to college. After all, every investor must assess risk, which in this case is the chance of dropping out. And if you’re a low income student and you don’t make it to graduation? You still have to pay back all the loans.

But every year, 45% students with scarce resources apply to university. They take the risk anyways.

Why Do Students With Low Incomes Drop Out of College at Higher Rates?

Like any social issue, the graduation rate is multifaceted and student identities are intersectional. It is impossible to separate the influence of race, first generation status, gender, ability, and other factors from the equation. For the individual experience, all these factors combine to define who we are and the opportunities that are presented to us. But when students were asked why they drop out, the majority have the same answer - financial need.

A student with a low income might simply run out of cash to cover the costs of tuition, textbooks, rent, utilities, healthcare, transportation, food, etc. Or maybe they don’t have enough time to both work and study. And of course, they might become overwhelmed with the stress of constantly trying to make ends meet.

There is also another barrier associated with scarce resources - the psychological tax that can impede cognitive functioning. Every person can relate to this, the suffocating feeling of not having enough and the cognitive burden associated with it.

Even if you have never had to worry about money before, you probably have been scarce on the resource of time.

Imagine you’ve received a big break in your career. You’ve been asked to give a talk on your field of expertise at a renown university. You arrive half an hour early, only to be told that your talk has actually been moved to the other side of campus. And, the conference is running early, so you’ll need to start your talk in about 10 minutes.

What do you do? You start to sprint to the other side of campus as fast as you can. You don’t notice the beautiful bed of petunias on your left, the towering marble statue on your right, or the man having an epileptic seizure at the bottom of the stairs to the building you’re entering. Why didn’t you notice him? If you consider yourself a good person, you should have, right? But you didn’t, and most people wouldn’t. In fact in the groundbreaking 1973 study on helping behavior, most priests didn’t notice someone who needed urgent help when they were in a rush.

This study was part of the reason researchers began to question the impact of scarcity on psychological process. In Scarcity: Why Having Too Little Means So Much, researchers Sendhil Mullainathan and Eldar Shafir demonstrate why being scarce on any resource creates a unique mental state with advantages and challenges. They believe that this selective information processing could occur any time that an individual does not have enough of something, be it food, water, money, time, or even social needs.

If you’re in a rush to get to work, you focus only on the destination. If you’re at a party feeling lonely, you might begin to overanalyze your own behavior. And if you’re late on rent, you're probably tunneling on one thing – getting more money.

We tend to over focus, or “tunnel” in on the scarce resource, pushing away other information. This happens without even trying, its our brain’s way of ensuring that we get what we need, quickly.

Mullainathan and Shafir argue that tunneling can make you better at obtaining your resource, but it might make it more challenging to accomplish other goals.

In one study, researchers administered a cognitive test to a group of sugarcane farmers in India. They tested them twice, just after they had received their income from their annual crop and months later when their money was running low. They found that the same people performed worse on the test when they were low on income than when they had just received their earnings.

If you’re a student with scarce resources, you need to find constant streams of income to maintain enrolled. You have the added labor of constantly finding and applying to various grants and scholarships. Then there is the job you invariably need to supplement your income. You are scarce on at least two resources - time and money. Add to that a cognitive tax while studying for tests and writing essays? Impossible! Or nearly impossible.

How Can Higher Education Institutions Help?

There are many ways higher education institutions can make the financial situation for students better. But increasing and simplifying avenues to funding would be an excellent place to start.

From the beginning to the end of the student journey there are effective interventions. An investigation of a phenomena called summer melt on NPR's Hidden Brain hosted by Shankar Vedantam examines why many students with scarce resources drop out before their first day of college.

Harvard researchers estimate that between 10%-40% of high school seniors who have been accepted to university and who intend to go, do not make it to the start of the semester. The rate is especially high for low income students.

Vedantam reports that summer melt may occur due to the complications of the enrollment and financial aid process before the semester starts. Especially for students who do not have people in their life who know the process, each problem that emerges can be daunting and complicated.

Georgia State University decided to combat the problem of summer melt with an autobot called “Pounce,” named after their panther mascot. This autobot sends text message reminders to students who haven’t completed the enrollment checklist before the deadlines. But the autobot doesn’t stop with reminders, it also allows students to text questions about anything they might need help with, like “when is the deadline for FASFA” or “How can I register for classes?” In the first year after Pounce was introduced, the number of students who dropped out before the start of semester went from 18%-14%. It was a simple and cost-effective solution.

Automation is another way to set students up right. Automating the financial aid documents or fee waivers with tax information may save the student from complications.

It is also important to be clear about how much the student will have to pay the day tuition is due, and how much they should budget for other expense.

I remember how shocked I was the first time I got the bill for tuition. I hadn’t realized that the work study program in my financial aid package was expected income towards my tuition. This meant I had to pay for it upfront, and hope I would be hired for a student job when I arrived on campus.

I also remember the day I realized that most scholarships at my school were not stackable. I had to pay the school a couple hundred dollars because the award I won had maxed out my eligibility for grants. Essentially, they replaced the grant I usually received from the school with an award, which was less than the original grant, so I owed the money to make up the difference.

Fortunately, I had parents who could help me cover unexpected costs. But many students don’t have that luxury.

This is where another intervention has proven successful, especially right at the tail end of the journey. Every year, a number of college seniors don’t graduate university due to small unpaid bills -with only 1 or two semesters left of their program.

Again, Georgia State University set out to combat this problem. Spearheaded by a donation from their president Mark Becker, they began calling students with an outstanding balance and offered to pay the rest. Titled the “Panther Retention Grant” this emergency funding averaged less than $1,000 per grant and saved hundreds of students who would have been dropped from their programs. Small, cost-effective and timely grants increased retention for these valuable students and provided a lifeline during a time of need.

This exact situation happened to a close friend of mine in college. Our junior year, her father passed away. Suddenly the money that had paid for her first years of college was gone. She tried to cut costs by sleeping on couches and working extra jobs, but by her senior year she couldn’t make ends meet. I don’t know if our school has an emergency grant fund, but it does have a very compassionate professor. This professor stepped in and paid her last semester of tuition, allowing her to graduate on time with the rest of us.

If institutions want to help students than their financial aid programs must understand the conditions their students face. Funding should consider not just tuition but the cost of living, including adequate health care, room and board, transportation, food, textbooks, etc.

For colleges, this might mean making some difficult choices about prioritization. In the episode Food Fights, on Malcom Gladwell’s podcast Revisionist History, Gladwell explores how institutions can better prioritize investments.

Gladwell explains that schools try to attract students from various income brackets. Basically, colleges need students who can pay the tuition at price tag value to cover the cost of operation. To do this, higher education institutions have to attract high income students, or more specifically, their parents. To entice these families, universities invest in all sorts of bells and whistles: fancy chefs, gyms, lounge pools, flower beds - you name it.

But some schools make a different choice. Gladwell uses Vasser College in New York as an example. Vasser is renown for its awful cafeteria food. But what do they do well? Financial aid. Rather than spending money on material extravagance, the university is investing in enriching and diversifying the student body - the benefits of which are priceless and ubiquitous.

This is where prioritization is so important. Universities should prioritize funding for students with scarce resources. Parents should value an equitable institution with a diverse student body over a five star cafeteria. Students should encourage their institutions to cut the budget on a concerts and free swag, and spend it on scholarships instead.

I think this is an important note to end on. If there is an unjust system - its up to each participant to change it.

And we do have to change the system. Universities need intelligent and hardworking students from all backgrounds to enrich discourse. Our country needs a skilled and diverse labour force to contribute to the global market. And the world needs equity and justice to define our institutions.

So this is where you come in, my dear student. Please try on your test, we need you.